The 1950’s B movies were a place where size really mattered, mostly because a majority of the plots revolved around making something much too big — or much too small. The culprit might be nuclear weapons, magical mist, a gypsy curse or intergalactic radiation — but one of two things generally happened as a result.
If it was a “growing” movie, the mild mannered protagonist/spider/colony of ants grew to spectacular size and immediately began wreaking havoc or attempting to enslave humanity. If it was a “shrinking” movie, the protagonist gradually loses mass throughout the story and eventually starts being terrorized by bugs, dust and house cats. In either case, the witnesses to the transformation can never quite believe it is happening until it is so entirely obvious that it is comical.
Apple, with its focus on design, precision and sleek opulence, has probably never in its over three decades of existence been compared to a B movie — but there is a first time for everything.
And as the holiday season gets into gear, it seems like it might be just about time to start wondering if Apple managed to end up on the wrong side of a magical mist, gypsy curse or intergalactic space radiation. Because, judging by the activities tied to Apple Pay and Apple Watch, it sure is starting to look like a case of the Incredible Shrinking Numbers. And, even though we’ve been serving a dose of reality over the last year on all that is Apple Pay, now, after a year’s worth of numbers which we bring to you every quarter on adoption, it’s now getting just noticeable enough to catch observers’ attention.
Apple Pay — Another Black Friday Bust
Regular PYMNTS readers already know that the Apple Pay adoption picture in 2015 was, to put it kindly, disappointing. The Apple Pay hype-o-meter was pinned to the far right starting back in September 2014, and stayed that way despite hard numbers proving the contrary.
Starting with its “busted” 2014 Black Friday debut, which proved that more than 95 percent of those early adopter/potential users said no at the POS, the picture showed some signs slight of improvement in the second PYMNTS/InfoScout Apple Pay use survey in March of 2015. But even that was slight, with more than 80 percent of potential Apple users still never even tried the service.
Most of those improvements seemed to retreat by June, when the percentage of users with iPhone 6s and who were in stores where Apple Pay is accepted and who then gave it a try fell to 13 percent, and then again in early October when a series of reports indicated that Apple Pay’s progress was, by and large, stuck in the mud.
“And quarter after quarter, what we’ve found is that those consumers who can (have the phones and shop in stores where it is accepted), really don’t use it much at all. Usage has stalled. After looking at this for a year, 5 percent is about the extent of the usage after more than a year in the market,” Karen Webster noted in a recent commentary on Apple’s P2P prospects.
And, now, with the newest data now gracing the pages of our Apple Pay Transaction Tracker from Black Friday 2015, we have suddenly brought new meaning to the word “bust” with an even weaker performance than last year.
According to data collected data from 300,000 shoppers at the POS on Black Friday, nearly half as many eligible purchase were made via Apple Pay on Black Friday this year, in comparison with 2014.
And, of course, last year’s results were widely heralded as bad but were explained away as “it was new” and it was – just 30 days old, really. But when those early adopters who stood in line to get those iPhone 6s didn’t rush in droves to use it, you know you have a problem.
Despite Tim Cook’s sales pitch that plastic cards were so inconvenient and last century, only 3 percent of those who bought iPhones did so to get Apple Pay. Those prehistoric plastic cards serve even the early adopters well.
Many observers have noted that this figure only counts in-store shopping and that in-app purchases made through sites like Target and Best Buy, or services like Airbnb and Uber, were not counted in the results. But don’t get your hopes up there either.
There we find a ton of well entrenched digital players – think PayPal, Visa Checkout, MasterPass, and the good old reliable card on file.
Not to mention all of those Amazon one-clickers who never go anywhere else to shop.
Amazon, by the way, holds the number one spot for in app purchases – and they don’t accept Apple Pay. Netierh does #2 contender, eBay — and by a wide margin.
Neither does mobile’s rising power player (and big Black Friday mobile performer) Walmart.
And, then again, if in app Apple Pay was the game changer of which everyone speaks, it seems odd that Apple didn’t mention it. Since when they want you to know their numbers, keeping them a secret isn’t necessarily what they do.
Speaking of being secretive for Christmas …
Apple Watch — Fears Of Looming Failure
The Apple Watch has been and continues to be a lasting source of mystery in the ecosystem, as it seems genuinely uncertain to most if the product is soaring or sinking.
The newest round of figures, care of the market research firm IDC, estimate Apple Watch sales at 3.9 million worldwide in Q3 2015. That would make the Apple Watch the second most popular wearable in the market, following behind the various Fitbit lines. That represents a pick up from Q2, mostly attributable to the product actually going on sale in various new markets.
The IDC figures also indicate the most popular model of the watch is the least expensive: the Apple Watch Sport.
IDC figures are an estimate, as Apple has not broken out individually reported figures for the watch — instead lumping it in with Beats devices, iPads and Apple TV in a single category when it reports earnings quarterly.
But the IDC report goes nicely with recent news that the Apple Watch was a favorite Black Friday purchase, spurred along by some good old-fashioned discounting.
Best Buy was selling the Apple Watch for $100 off — and $50 off the sport model — while Target was giving away a $100 gift card with the purchase of an Apple Watch, which goosed some big interest. Neither retailer would comment directly on the outcome of the promotion.
FBR Capital Markets analyst Daniel Ives noted that he believes the Apple Watch could be on the brink of igniting wearable tech, based on conversations he had with consumers at retailers selling the Apple Watch. He forecast that December quarterly sales would approach 5 million to 6 million units.
“The longer-term consumer adoption curve for the Apple Watch remains a major ‘hot button’ question among tech investors, as broad customer demand is yet to be seen, and as Apple enters a major ‘prove me’ period during the holiday season,” he wrote.
Ives anecdotal evidence aside, IBM’s Watson Trend report cited the Apple Watch as among a handful of tech items topping consumers’ shopping lists.
And yet, Apple Watch continues to elicit concerns.
For while the good news about Black Friday was making the rounds, so was the bad news about Apple Watch ownership — namely that it is not all it is cracked up to be.
Despite reports of 97 percent user satisfaction, unsatisfied users are coming out of the woodwork. One Quartz writer, and Apple Watch owner, described the watch as a “stalled platform.”
“The main issue: I’m still only using it for a few tasks, and those haven’t changed at all,” the writer noted.
And that is not a rare complaint. Lack of useful functionality was a primary complaint among 340 Wristly subscribers who said they have already stopped using their smartwatch.
According to that survey, 17 percent of respondents said they returned their Apple Watch within days of buying it, while a further 28 percent stopped using it before two weeks were up. Other than the lack of utility complaint, users also noted the watch was slow and “sort of clunky.”
Plus, there is the nagging question: When does Apple ever discount anything?
The answer: nearly never.
Unless it isn’t selling well — and thus attracting developers to build for it and make it useful enough to keep people actually using it …
Is Apple in trouble? Not as long as consumers love the iPhone.
But Apple Pay and Apple Watch were the two big releases in 2015. Apple Pay is evidently stalled, possibly dangerously so unless in-app purchase numbers are going to make a run for being the biggest seasonal miracle since the Wise Men found Jesus in a manger.
Apple Watch is more of a question mark, but the question no longer seems to be “is it a hit?” and is instead “can we turn it into a hit?”
Which is truly a sci-fi position for Apple to be in.
And that doesn’t even include Apple Music – but we’ll save that discussion for another day.